By: Max Crampton Thomas
2 min read July 2020 — To say the least, the COVID-19 pandemic has been nothing short of an unexpected wildfire to peoples’ health and financial stability. While the onus can’t be placed on the general public for not being prepared for something they didn’t expect, the past four months have proven that personal prosperity in the future will rely on preparing for the worst and expecting the unexpected. Coming on the heels of President Trump’s most recent address on the COVID-19 pandemic where he appeared to change tack and was quoted as saying, “It will get worse before it gets better,” it has never been more vital for individuals to make sound financial decisions as they are now faced with an economically uncertain future. Invest: explores some of the best practices for safe-guarding personal finances in the current economic climate.
Establish a relationship with your banking institution
There was a time when having an established relationship with your bank and a banker was a common practice, whether it was personal or business-related. Fast forward to 2020 and what was once commonplace has become more of a rarity, especially as it pertains to people’s personal finances. This in large part due to the ease of fintech and mobile banking technologies that have eliminated the need to visit a brick and mortar banking branch. Now with certain aspects of the CARES Act reaching their deadlines with no extension currently in place, like the Federal Pandemic Unemployment Compensation payments that are scheduled to run out this week, it would be advisable to visit your banking institution and continue to foster that relationship. If you don’t have a bank for your personal finances, now is as good a time as any to explore the variety of banking options available in the Tampa Bay region and find one that will best suit your personal financial needs.
Create a budget and stick to it
According to Forbes, “about half of Americans reported they had three months of expenses in savings for emergencies” while almost “40% said they would struggle to cover a $400 expense in cash.” In times of economic growth and prosperity, it is always advisable to establish a budget that allows you to tuck away some money in the case of unforeseen circumstances. The COVID-19 pandemic is the most significant unexpected circumstance in recent years. For those who did not already have an established budget prior to the pandemic, the last four months may have been quite difficult to push through. With no end date on the horizon for this crisis, it is now crucial to establish a livable budget with an emphasis on intentional spending and a more frugal lifestyle.
Find ways to cut back unneeded expenses
Before COVID-19, Tampa Bay was in line for another record-breaking year in terms of economic growth, which set a positive tone that permeated throughout the local community and people’s spending habits. Now faced with a year of economic pullback, it is time to reassess how you are spending your money and find the areas where you can cut back. An article by Forbes discusses understanding your “spending triggers” and addressing them head on. This can be in the form of recognizing that you don’t need to spend money on the daily coffee from your local coffee shop and instead brew your own at home, or stopping a habit of needless spending on e-commerce hubs stemming from boredom. One of the easiest expenses to cut back on is dining out and takeout. The U.S. Bureau of Labor reported that in 2018, consumers spent an annual average of $3,459 on these options. With a large majority of businesses still offering work from home to their employees, it is the perfect time to sharpen those culinary skills.
Continue to reinvest in yourself
The U.S. Bureau of Labor Statistics reported an unemployment rate of 10.4% for the state of Florida in June 2020. This number can be directly attributed to the fallout from the economic challenges that the pandemic has presented to all business sectors. While there is no way to 100% recession-proof yourself as it pertains to job security, and ultimately financial security, you can continue to make yourself as valuable an asset as possible by strengthening your skill sets and acquiring new ones. This may be in the form of continuing education, picking up a new skill set in your free time or even just pushing yourself the extra mile at your job. There is no way to be immune from layoffs and furloughs, but reinvesting in yourself and your work can make that decision a lot harder for a company if it ever comes time.
These practices toward making sound financial decisions don’t just apply to individuals, as most companies have also applied these ideas to their operations in order to acclimate to the current economic conditions. For example, a variety of businesses in the region have leveraged their relationships with their banking institutions to help them with PPP loan applications and acquiring any additional funding that is available to them. Businesses have reorganized their budgets and found ways to cut back unneeded expenses, which unfortunately has sometimes come in the form of laying off portions of their workforce. Finally, almost every business has had to reinvest in their operations and in some ways reinvent themselves to continue on through these unprecedented times.
To learn more about making the right financial choices in this economic uncertainty as it pertains to your business or personal well-being, register now for the Invest: Tampa Bay 2020 Virtual Launch Conference! The conference, which takes place on Aug. 20 at 11:30 a.m., will feature three robust panels including a banking and finance panel moderated by Rita Lowman, president of Pilot Bank, with panelists Gregory Kadet, managing director of UBS Wealth Management; Terry Igo, CEO of Tampa Bay Trust Company; Scott Perry, chairman and CEO of AmeriLife Group; and Travis Jennings, CEO of Finance Cape.
If ever there was a time to seriously look at your finances and improve your financial standing, it’s now. Get started by registering to access these valuable insights.